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The Mayor of Statesville Is Considering the Purchase of a New

Question 35

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The mayor of Statesville is considering the purchase of a new computer system for the city's tax department.The system costs $75,000 and has an expected life of five years.The mayor estimates the following savings will result if the system is purchased: What can be said about the computer system's internal rate of return if the net present value at 12% is positive? Statesville uses a 10% discount rate for capital-budgeting decisions. A) The internal rate of return is greater than 12%. B) The internal rate of return is between 10% and 12%. C) The internal rate of return is less than 10%. D) The internal rate of return must be less than 5%. E) There is insufficient information to make any judgment about the internal rate of return.
The mayor of Statesville is considering the purchase of a new computer system for the city's tax department.The system costs $75,000 and has an expected life of five years.The mayor estimates the following savings will result if the system is purchased: What can be said about the computer system's internal rate of return if the net present value at 12% is positive? Statesville uses a 10% discount rate for capital-budgeting decisions. A) The internal rate of return is greater than 12%. B) The internal rate of return is between 10% and 12%. C) The internal rate of return is less than 10%. D) The internal rate of return must be less than 5%. E) There is insufficient information to make any judgment about the internal rate of return.
The mayor of Statesville is considering the purchase of a new computer system for the city's tax department.The system costs $75,000 and has an expected life of five years.The mayor estimates the following savings will result if the system is purchased: What can be said about the computer system's internal rate of return if the net present value at 12% is positive? Statesville uses a 10% discount rate for capital-budgeting decisions. A) The internal rate of return is greater than 12%. B) The internal rate of return is between 10% and 12%. C) The internal rate of return is less than 10%. D) The internal rate of return must be less than 5%. E) There is insufficient information to make any judgment about the internal rate of return.
The mayor of Statesville is considering the purchase of a new computer system for the city's tax department.The system costs $75,000 and has an expected life of five years.The mayor estimates the following savings will result if the system is purchased: What can be said about the computer system's internal rate of return if the net present value at 12% is positive? Statesville uses a 10% discount rate for capital-budgeting decisions. A) The internal rate of return is greater than 12%. B) The internal rate of return is between 10% and 12%. C) The internal rate of return is less than 10%. D) The internal rate of return must be less than 5%. E) There is insufficient information to make any judgment about the internal rate of return.
The mayor of Statesville is considering the purchase of a new computer system for the city's tax department.The system costs $75,000 and has an expected life of five years.The mayor estimates the following savings will result if the system is purchased: The mayor of Statesville is considering the purchase of a new computer system for the city's tax department.The system costs $75,000 and has an expected life of five years.The mayor estimates the following savings will result if the system is purchased: What can be said about the computer system's internal rate of return if the net present value at 12% is positive? Statesville uses a 10% discount rate for capital-budgeting decisions. A) The internal rate of return is greater than 12%. B) The internal rate of return is between 10% and 12%. C) The internal rate of return is less than 10%. D) The internal rate of return must be less than 5%. E) There is insufficient information to make any judgment about the internal rate of return.
What can be said about the computer system's internal rate of return if the net present value at 12% is positive? Statesville uses a 10% discount rate for capital-budgeting decisions.


A) The internal rate of return is greater than 12%.
B) The internal rate of return is between 10% and 12%.
C) The internal rate of return is less than 10%.
D) The internal rate of return must be less than 5%.
E) There is insufficient information to make any judgment about the internal rate of return.

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